Trump’s Obamacare Attacks Haven’t Driven Up the Uninsured Rate — Yet

Plus, how tax cuts fueled record bank profits By Yuval Rosenberg and Michael Rainey Uninsured Rate Holds Steady in Trump’s First Year The number of Americans without health insurance was stable during the first year of the Trump administration, with the uninsured rate rising to 9.1 percent, a statistically insignificant increase from 9 percent in 2016, according to [an analysis]( released Tuesday by the Centers for Disease Control and Prevention. The CDC said that 29.3 million Americans were uninsured in 2017, compared with 28.6 million the prior year. The new report appears to contradict a recent survey by the Commonwealth Fund [indicating]( that the number of people lacking health insurance has risen by 4 million since 2016, as well as a [Gallup poll]( that showed a slight increase in the uninsured rate in 2017. The CDC survey, however, is much larger and covers the entire calendar year, and is generally seen as the more authoritative analysis. The findings came as a surprise to some supporters of the Affordable Care Act, who have warned that “[sabotage]( by the Trump administration and Republican lawmakers will cause more people to lose or go without health insurance. At the same time, the report contradicts President Trump’s repeated claim that Republicans have effectively repealed Obamacare. The number of people getting health insurance through the federal exchanges was relatively stable last year. Larry Levitt of the Kaiser Family Foundation [pointed out]( that the changes Republicans have made to Obamacare — including the reduction in outreach programs and the elimination of the individual mandate penalty, as well as the possible expanded availability of non-ACA compliant insurance plans — have not taken full effect yet, and the numbers may worsen in the next few years. Levitt also noted that the report shows a significant difference in insurance rates between states that expanded Medicaid under Obamacare and those that did not. While the gap has been substantial from the start, it grew larger in 2017 as the percentage of uninsured in non-expansion states increased to 19 percent, up from 17.5 percent in 2015. Another sign of deterioration in coverage was an increase in the uninsured rate for middle class (“not poor”) adults, which rose to 8.2 percent in 2017. Katherine Hempstead of the Robert Wood Johnson Foundation told the Associated Press that this increase could reflect the big jumps in Obamacare premiums that hit those without subsidies the hardest. “They are uniquely required to pay the full retail cost of health care,” Hempstead said. Tax Cuts Fuel Record Bank Profits … Thanks in part to the tax cuts taking effect this year, banks insured by the Federal Deposit Insurance Corporation [reported]( record earnings of $56 billion for the first quarter of 2018. That represents a $12.1 billion, or 27.5 percent, increase from a year ago. More than 70 percent of the 5,606 commercial banks and savings institutions reporting to the FDIC recorded an increase in earnings on a year-over-year basis. The tax cuts weren’t the only source of increased profitability — the FDIC report also cited higher net operating revenue as a contributor — but the reduction of the top corporate tax rate from 35 percent to 21 percent made a big difference. Without the tax cut, writes [American Banker]( “net income would have been below $50 billion.” … and Global Dealmaking on Pace for New High The tax cuts are boosting corporate dealmaking, too, putting 2018 on track to be the biggest year ever for mergers and acquisitions: “Tax cuts helped set the stage for the recent boom in deals,” CNBC [reports]( with the total value of mergers and acquisitions in 2018 hitting $2 trillion this week. Global M&A is keeping up the pace established in the first quarter, when deals worth $1.2 trillion were announced, a 67 percent increase over the first quarter in 2017. The lower corporate tax rate and the repatriation of foreign holdings is freeing up cash that companies are using to make new investments. Deals announced this week include Fifth Third Bancorp buying MB Financial for $4.7 billion, Blackstone buying LaSalle Hotel Properties for $3.7 billion, and General Electric merging its transportation business with Wabtec in an agreement worth $11.1 billion. Number of the Day: $6.1 Billion U.S. companies announced $6.1 billion in stock buybacks a day over the course of the April-May corporate earnings-reporting season, according to TrimTabs Investment Research. That’s the second-highest on record, behind only to the $6.6 billion daily during the January-February earnings season. In all, companies announced $183.4 billion in new stock buybacks during the most recent reporting period, down from $191.4 billion in the prior quarter. Five companies accounted for 75 percent of the latest quarterly total, with Apple’s massive [$100 billion plan]( leading the way. “The buyback boom early this year confirms our view that the main use of corporate America’s tax savings will be takeovers and stock buybacks rather than capital investment or hiring,” TrimTabs said. So there's [a sinkhole]( on the North Lawn of the White House, and it's growing. Symbolic? What do you say? Send us your feedback by emailing yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( to get their own copy of this newsletter. Why Sports Gambling Won’t Be a Jackpot for States Don’t bet on legal sports gambling solving states’ fiscal problems. “Gambling experts warn that starry-eyed lawmakers might be overestimating their haul from legalized sports betting,” [writes Stateline’s Elaine S. Povich](. “Differences in state tax structures, competition for a limited market of gamblers, the push for a federal framework and the continued allure of black-market betting all could cut into the hoped-for windfall.” A [2017 study]( conducted for the American Gaming Association projected that sports betting could grow to be a $41.2 billion business overall — and could deliver some $3.4 billion in tax revenues to state and local governments. That’s may sound like a huge score, but it isn’t, Lucy Dadayan, a senior policy analyst at the Rockefeller Institute of Government, tells Stateline. The $3.4 billion amounts to less than 0.3 percent of total state and local revenue, Dadayan said. Take New Jersey, for example. The state is poised to be one of the first to introduce legal sports gambling. But, according to [NJ.com]( New Jersey Treasurer Elizabeth Muoio testified Monday that the state is projecting $13 million in tax revenue from sports gambling for its next fiscal year, which starts July 1. Some state officials say that estimate sounds low. The 2017 study from the American Gaming Association projected that New Jersey could generate $21 million in new tax revenue, and other estimates range as high as $100 million, according to NJ.com. But even the high estimate still represents just a small fraction of the $37.4 billion budget New Jersey’s governor has proposed. News - [Trump Spending Cuts Allowed to Target Kids’ Health Insurance]( – Politico - [A Healthcare Giant Enters the Battle for Cheaper Housing]( – CityLab - [Democrats’ Next Big Thing: Government-Guaranteed Jobs]( – New York Times - [Democrats' ‘Better Deal’ Includes $50 Billion to Boost Teacher Pay]( – Axios - [Trump Says the Mueller Probe Is a Waste of Taxpayer Money. But His Budget Funded It.]( – Washington Post - [Ryan Facing Growing Doubts About Hold on Speakership]( – Politico - [America’s New Stealth Bomber Has a Stealthy Price Tag]( – Defense One - [Israel Launched World's First Air Strike Using F-35 Stealth Fighters, Air Force Chief Says]( – Haaretz - [The Next U.S. Recession Will Start in 2020, Survey Says]( – Bloomberg - [The U.S. Doesn’t Have Enough Truckers, and It’s Starting to Cause Prices to Rise]( – Washington Post - [Unemployment Rate Is Lowest in Years—and Many Americans Are Just Hanging On]( – Bloomberg - [What Barbershops Can Teach About Delivering Health Care]( – New York Times - [Apple Could Get Hit with Employer Tax in its Hometown]( – San Francisco Chronicle - [American Women’s $1 Trillion Burden]( – MarketWatch - [Inside the Trump Tweet Machine: Bad Grammar (on Purpose)]( – Boston Globe Views - [What the Farm Bill’s Failure Says About Congressional Function]( – John Patty, Vox - [Democrats Have a Better Deal for Teachers and Our Kids, Too]( – Chuck Schumer and Nancy Pelosi, USA Today - [The Supreme Court v. Your Paycheck]( – David Leonhardt, New York Times - [Jobs Programs Are Also Wage Programs]( – Jared Bernstein, Washington Post - [Business Head Taxes Take Aim at Having ‘Too Many Good Jobs’]( – Tax Foundation - [Make Drugs Cheaper by Encouraging Generics]( – Bloomberg Editors - [Younger Millennials Could Save America's Birthrate]( – Conor Sen, Bloomberg - [As Population Growth Slows, Populism Surges]( – Philip Auerswald and Joon Yun, New York Times - [Did Governors Target Opportunity Zones to Disinvested Communities?]( – Brett Theodos and Braydon Meixell, Tax Policy Center Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com. 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